Engine No. 1Environment

Chris James and The San Francisco Firm Proxy Fight Against Exxon Mobil.Corp

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In 2020, Chris James launched an investment firm, Engine No.1. One week after its launching, the firm posed the threat of a proxy fight to the energy giant Exxon Mobil Corp. Chris James wrote a letter that he intended to present to Exxon’s board. The letter was to challenge the company to invest more in clean energy. The San Francisco firm led by Chris James had the support of the California State Teachers Retirement System. Engine No.1 was persuading Exxon to spend its money better. It also wanted dividends preserved and the board refreshed. 

Chris James

In Chris’s letter, he identified four people that his firm would nominate to Exxon’s 10-person board. All four mentioned in that letter had expertise in clean technology and the running of energy companies. On having the board refreshed, Thomas P. DiNapoli, New York State Comptroller, pointed out that Exxon’s failure to adequately address climate risks was a serious concern to many shareholders. That is the importance that Chris James also points out in handling the letter. According to him, it indicated a need to review the company’s board. He argued that failure to appoint a new committee would see the company hurtle towards a tipping point from which there would be no return.

The San Francisco firm also wanted Exxon Mobil to cut costs on projects that were less likely to earn any money. Also, if required, Exxon can come up with a better plan for success in renewable energy. ExxonMobil was then under pressure from its investors for a long time, who believed that the gas emissions from greenhouses had reached a tipping point. The investors such as Chris James, needed the issue addressed as they felt that the damage from gas emission was accelerating. This campaign’s success greatly depended on the reaction of Vanguard Group, BlackRock, and State Street, the top shareholders at Exxon. Although Exxon had successfully beaten back previous activist efforts to change its climatic viewpoint, this particular climate activist’s interest would somehow push Exxon to act.